Pattern recognition is a popular topic especially with new and evolving traders. I’ve used pattern recognition to make trading decisions for 34 years. It’s not the only way to trade but it’s been a very successful method for me and I’m happy to share some insights with you. Pattern: Triangles The Setup The bullish setup is simple […]
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In our series on pattern recognition, in the last article we described the triangle pattern. Another trend following set up that is less common but still a useful strategy for your trading toolbox is the continuation Flag. Pattern: Flag The Setup The flag is a bullish setup like the Triangle pattern. Firstly, the trend must be up; […]
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Today we look at several Gap patterns. I prefer to use them as a continuation pattern especially during a strongly trending market. The problem with Gaps is they can only be defined several days after they occur. Therefore, we must apply some rules to help define the validity of the gap pattern before or as […]
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In today’s pattern recognition article the trading pattern is for scalpers. A scalper is someone who wants to get into the market, take a quick profit and move on. We are looking for quick moves of three to four days for profitable trades and losses of one day in duration. Pattern: Smash Bars Smash bars […]
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Today I’ll introduce you to my version of Swing Trading or Swing Target Trading which defines the risk/reward prior to the trade being implemented and is based more on momentum than trend following. Pattern: Swing Target Trading A swing is simply a move from a high point (HP) to a low point (LP) or from […]
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Pattern: Springs Trading Springs is one of the most profitable trades is in the opposite direction to a failed breakout off a sideways consolidation or accumulation area. The term Spring comes from a Wyckoff method and generally uses volume as a filter. We will define the Spring pattern without volume for our purposes here. The […]
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Pattern: Moving Average Breakout One of the first technical analysis indicators beginners are taught is the basic moving average crossover system. In nicely trending markets this method works extremely well. However, markets only trend about 25% of the time. It’s the other 75% that a normal moving average crossover will cause your account to bleed […]
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Pattern: Channel Breakout The Channel Breakout technique is a simple, robust trading method made famous by the Turtles Traders. It’s a profitable pattern favoured by many great traders and money managers. Like the Moving Average Breakout method, the Channel Breakout attempts to catch the early trend. As a result, whipsaw is a high probability as […]
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Pattern: Divergence Divergence is a trend reversal entry. As the trade is against the trend, there’s no need for a trend filter. There are 3 types of Divergence: Type A Bullish: Prices reach new secondary low while indicator puts in higher secondary low. Type A Bearish: Prices reach new secondary peak while indicator puts in […]
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How to win at trading: the hardest concept for a new trader to grasp is dealing with losses. Learn to deal with losses and you will win at trading. Sounds odd, right? The real key to success that every professional trader knows and understands is discussed in this brief video. If you really want to […]
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